DEVELOPING COUNTRIES
SANITATION
The most celebrated progress has been the achievement of the MDG target of halving the proportion of people without sustainable access to safe drinking water, years before the 2015 deadline. At the end of 2010, 6.1 billion people, the equivalent of 89% of the world’s population, had access to improved water sources. The number could reach 92% in 2015, according to the UN.208 The EU has
contributed to this success, claiming that “as a direct result of EU assistance, more than 70 million people gained access to improved water supply and 24 million to sanitation facilities between 2004 and 2013”.209
Nonetheless, this remarkable achievement needs to be tempered. In 2015, 605 million people still did not have access to an improved source of drinking water.210 Europe is not immune, as 100 million
Europeans did not enjoy safe drinking water in 2008.211 Furthermore, precisely measuring water
quality worldwide and keeping track of its safety, reliability and sustainability is an extremely complex task. According to the WHO, 1.8 billion people drink water contaminated by faeces, which underlines the strong interlinkage between water and sanitation.212
Ensuring access to sanitation for the world’s poorest remains a considerable challenge, especially in Africa and South Asia. It was estimated that in 2011, one billion people - 15% of the global population - were practicing open defecation.213 In 2015, 2.4 billion people were still deprived of improved
sanitation facilities and the MDG target for sanitation has been missed by approximately 700 million people.214 Challenges linked to access to water and sanitation are all the more difficult to tackle
because of several layers of complexity and inequalities.
5.3 A CROSS-CUTTING CHALLENGE WITH DIFFERENT LAYERS OF INEQUALITIES
The water and sanitation crisis is a worldwide challenge. However, the situation is particularly worrying in low Human Development Index (HDI) countries, where 65% of the population does not have access to improved sanitation and 38% to improved water.215 Over 40% of all people without
access to improved drinking water live in sub-Saharan Africa.216 Inequalities within medium HDI
countries are also cause for concern. It is estimated that half of the people living in these countries do not have access to improved sanitation and one person out of eight to improved water.217 For
example, more than 70% of inhabitations of the Bihar region in India are deprived of basic sanitation.218 Closing this inequality gap has not been tackled head on by governments in low and
208 WHO/UNICEF Joint Monitoring Programme for Water Supply and Sanitation Report (2012), “Progress on drinking water and
sanitation”, New York, p.4
209 European Commission (2014), Communication on “the European Citizens' Initiative "Water and sanitation are a human right! Water is a
public good, not a commodity!"”, COM (2014) 177 final
210 United Nations (2012), “Report on the Millennium Development Goals”, New York, p.52
211 UN News Centre, “Over 100 million Europeans lack access to safe drinking water, UN says”, 14 March 2008 (available at
http://www.un.org/apps/news/story.asp?NewsID=25978; last accessed on: 23 November 2015)
212 WHO/UNICEF (2014), “Progress on drinking-water and sanitation – 2014 update”, New York, p.42 213 UNICEF Press Centre, “Water, Sanitation and Hygiene (WASH)”, 10 March 2014 (available at
http://www.unicef.org/media/media_45481.html; last accessed on: 23 November 2015)
214 WHO/UNICEF (2015), “Progress on drinking-water and sanitation – 2015 update”, New York, p.5
215 UNDP (2011), “Human Development Report 2011 - Sustainability and Equity: A Better Future for All”, New York, p.53 216 UN, “Global issues-Water” (available at http://www.un.org/en/globalissues/water/; last accessed on: 23 November 2015) 217 UNDP (2011), “Human Development Report 2011 - Sustainability and Equity: A Better Future for All”, New York, p.53 218Ibid. p.46
56 middle income countries, as only 17% apply financial measures to reduce inequalities in access to sanitation for the poor, compared with 23% for drinking water.219
There are important differences between urban and rural areas. Poor and rural populations are the most affected by the lack of improved water and sanitation, even though the number has decreased from 1.1 billion in 1990 to 653 million in 2010.220 Cities also face a significant number of obstacles
linked to water quality, such as wastewater discharge. Moreover, water and sanitation facilities do not always keep up with urban growth and the proliferation of slums and informal settlements. By resorting to informal providers, populations living in these areas are also exposed to the risk of paying high amounts of money to benefit from poor quality water. The number of people living in cities without access to an improved drinking water source actually increased from 111 million in 1990 to 149 million in 2012.221
The lack of access to WASH is also a gender issue in developing countries. The burden of collecting water falls predominantly on women and girls. They bear this responsibility in 70% of households in 45 developing countries and can spend up to six hours per day collecting water.222 The fact that this
situation is also detrimental to their education and employment underlines the connection between water and other pressing development challenges. Furthermore, in some countries, the lack of menstrual hygiene management threatens the health, dignity and education of women and girls. WASH is also important to guarantee food security and good health. Populations affected by the lack of WASH are often the same as those who suffer from undernutrition. There are 793 million people worldwide who are undernourished.223 This situation can result from insufficient water for agricultural
production, but also from unsafe water, inadequate sanitation or insufficient hygiene. The WHO estimated that half of global malnutrition was caused by repeated incidence of diarrhoea and intestinal worms resulting from poor WASH.224 Diarrhoea caused by poor WASH is responsible for the deaths of
842,000 people annually, including 361,000 children under the age of five.225 Moreover, 38% of
hospitals and clinics in 54 developing countries do not have access to any water source.226 The lack of
WASH in healthcare facilities, beyond the impossibility of providing safe care, also weakens the ability to help prevent and respond to disease outbreaks such as the recent Ebola crisis.
The important role WASH plays in a wide range of development challenges emphasises the pressing need for policy coherence in developing countries. Problems arise when there are contradictory incentives across policy areas. For instance, in India, the fact that the cost of energy to pump water
219 UN Water/WHO (2014), “Investing in water and sanitation: Increasing access reducing inequalities”, UN-Water Global Analysis and
Assessment of Sanitation and Drinking-Water GLAAS 2014 Report, Geneva p.15
220 United Nations, “Global issues-Water” (available at http://www.un.org/en/globalissues/water/; last accessed on: 23 November 2015) 221 Vallo, M. (2015), “La crise de l’eau illustrée en 5 graphiques”, LeMonde, 20 March 2015 (available at
http://www.lemonde.fr/ressources-naturelles/article/2015/03/20/la-crise-de-l-eau-illustree-en-5-graphiques_4597592_1652731.html; last accessed on: 23 November 2015)
222 WHO/UNICEF (2015), “Progress on drinking-water and sanitation – 2015 update”, New York, p.38; United Nations, “Water and
gender”, 2013 (available at http://www.unwater.org/fileadmin/user_upload/unwater_new/docs/water_and_gender.pdf; last accessed on: 23 November 2015)
223 FAO (2015), “The State of Food Insecurity in the World 2015” (available at http://www.fao.org/hunger/key-messages/en/; last
accessed on: 23 November 2015)
224 More information at WaterAid, London School of Hygiene and Tropical Medicine, Sanitation and Hygiene Applied Research for Equity
(SHARE), “Under-nutrition and water, sanitation and hygiene”, July 2013
225 WHO (2015), “Drinking water”, Fact sheet N°391, June 2015 (available at http://www.who.int/mediacentre/factsheets/fs391/en/; last
accessed on: 23 November 2015)
226 Neira, M., Kelley E., Bahl R., Chopra M., Wijesekera S., WHO-UNICEF (2015), “Water, sanitation and hygiene in health care facilities.
57 for agriculture is subsidised has led farmers to extract more water than necessary, thus hampering the development of more efficient and sustainable practices.227
This cross-cutting nature of water is reflected in the EU’s 2011 Communication “Increasing the impact of EU Development Policy: an Agenda for Change” and its subsequent Framework for Action for the period 2014 to 2020, which recognises the links between water and food and energy security.228
5.4 FINANCING AS A BACKBONE
A sustainable development goal on water and sanitation will not be met without allocating adequate financial resources. According to the “3Ts model”, the sources of financing for water and sanitation are “tariffs” paid by users, taxes and transfers by external sources such as official development assistance (ODA).229 Ensuring that enough financial resources are efficiently allocated to water and
sanitation remains an enormous undertaking.
One significant barrier is the lack of money being allocated to the water and sanitation sector by the national governments of vulnerable countries. The 2008 eThekwini commitment signed by 30 African governments to allocate at least 0.5% of GDP in funding in sanitation and hygiene is respected by very few countries.230 Furthermore, many developing countries lack mechanisms to track funding for
water and sanitation, making it very difficult to ensure that financial resources are really allocated to this sector. As it happens, one of the proposed measures of the Addis Ababa Action Agenda, agreed upon by UN member states in July 2015 to successfully implement the SDGs, is to encourage countries to set appropriate national spending targets for investments in essential public services such as water and sanitation.231
Nonetheless, external support can be vital for recipient countries and can even constitute, as in Burkina Faso, the biggest share of financing for WASH. Globally, $10.9 billion in ODA was allocated to water and sanitation in 2012. Even if this is a 30% increase from the $8.3 billion allocated in 2010, there is still a significant financial gap to be addressed.232 No less than $27 billion would be required
annually to provide access to improved water supply and sanitation.233 A total of $9.5 billion would
be necessary to achieve the MDG 2015 sanitation goal; a figure that could rise to $100 billion, the equivalent of the entire annual ODA, if tertiary wastewater treatment for waste streams in urban
227 Clay, J. (2013), “Are agricultural subsidies causing more harm than good?”, The Guardian, 8 August 2013 (available at
http://www.theguardian.com/sustainable-business/agricultural-subsidies-reform-government-support; last accessed on: 23 November 2015)
228 European Commission (2011) Communication on “Increasing the impact of EU Development Policy: an Agenda for Change”, COM
(2011) 0637 final; Dalamangas, S., Presentation for the EPC Blue Gold Task Force Workshop, “Water: A factor of instability or an
opportunity for cooperation?”, Directorate General for Development and Cooperation, European Commission, 9 December 2015, Brussels
229 More information at Global Water Partnership Toolbox (2013), “Generating basic revenues for water (A3.03)” (available at
http://www.gwp.org/en/ToolBox/TOOLS/The-Enabling-Environment/Investment-and-Financing-Structures/Generating-basic-revenues- for-water/; last accessed on: 23 November 2015)
230 WaterAid (2013), Report, “Keeping promises: why African leaders need now to deliver on their past water and sanitation
commitments”
231 United Nations (2015), Addis Ababa Action Agenda of the Third International Conference on Financing for Development (Addis Ababa
Action Agenda), The final text of the outcome document adopted at the Third International Conference on Financing for Development (Addis Ababa, Ethiopia, 13–16 July 2015) and endorsed by the General Assembly in its resolution 69/313 of 27 July 2015, New York
232 UN Water/WHO (2014), “Investing in water and sanitation: Increasing access reducing inequalities”, UN-Water Global Analysis and
Assessment of Sanitation and Drinking-Water GLAAS 2014 Report, Geneva, p.x
233 Sachs, J., Schmidt-Traub, G. (2014), “Financing Sustainable Development: Implementing the SDGs through Effective Investment
58 areas is included.234 According to the UK-based international NGO WaterAid, the achievement of
universal access to water, sanitation and hygiene will require the amount of ODA for these sectors to at least double from current levels by 2020.235
The EU and its member states are the largest donors in the water sector, providing €1.5 billion every year for water and sanitation programmes in developing countries. For example, the EU allocates €81 million to water through its 'Global Public Goods and Challenges' (GPGC) programme.236 In order to
help achieve the MDG on water and sanitation, the EU set up the ACP-EU Water Facility (Africa Caribbean Pacific - European Union Water Facility) in 2004.237 The programme provided and
leveraged investment in water and sanitation services in the ACP region. It mobilised a wide range of actors, including local water operators, local governments and civil society, with the common objective of improving the management and governance of these services. However, the ACP-EU Water Facility has not yet been renewed. This is a cause for concern, as the implementation and financing of the SDGs is an immense undertaking that will greatly benefit from an ambitious EU programme succeeding the Facility. This can only be done with the support of the European Parliament and member states.
A better targeting of funds would lead to greater aid effectiveness. For example, aid fragmentation is a problem, as numerous small African countries have to work with 25 or more different donors.238
This fragmentation makes financial management and the coordination of programmes more complex. It is therefore paramount to enhance good collaborative behaviours between all donors, including the EU. According to the International Water and Sanitation Centre (IRC), building sustainable water and sanitation sector financing strategies that incorporate financial data on all 3Ts, enhancing government leadership of sector planning processes, setting up a single information and mutual accountability platform built around a multi-stakeholder, government-led cycle of planning, monitoring and learning are all measures that could increase aid effectiveness.239
Public funds alone will not be sufficient to fill the financing gap. In order to leverage additional financing, the EU resorts to blending, a mechanism that links grants provided by ODA with loans or equity from public and private financiers. Even though blending has been used primarily for public investments, it is also a catalyst for private financing. Since 2007, this tool has been used for 168 projects and €1.2 billion worth of EU grants generated investments of €32 billion. Water currently represents 20% of the blending instrument behind energy (35%) and transport (26%).240 Reporting
and accountability mechanisms must, however, be implemented to ensure that investments meet development objectives effectively.
234 UN (2014), “International Decade for Action “Water For Life” 2005-2015: Financing Water” (available at
http://www.un.org/waterforlifedecade/financing.shtml; last accessed on: 23 November 2015)
235 WaterAid (2015), “Essential element: why international aid for water, sanitation and hygiene is still a critical source of finance for many
countries. - A WaterAid report with analysis provided by Development Initiatives”, July 2015, p.7
236 European Commission (2014), Communication on “the European Citizens' Initiative "Water and sanitation are a human right! Water is a
public good, not a commodity!"”, COM (2014) 0177 final; Dalamangas, S., Presentation for the EPC Blue Gold Task Force Workshop, “Water: A factor of instability or an opportunity for cooperation?”, Directorate General for Development and Cooperation, European Commission, 9 December 2015, Brussels
237 More information at European Commission, “ACP - multi-country cooperation – Water” (available at
https://ec.europa.eu/europeaid/regions/african-caribbean-and-pacific-acp-region/acp-multi-country-cooperation/acp-eu-water- facility_en; last accessed on: 23 November 2015)
238 OECD (2011), “Trends in In-country Aid Fragmentation and Donor Proliferation; An Analysis of Changes in Aid Allocation Patterns
between 2005 and 2009”, Paris, p.7
239 Uytewaal, E. (2015), “Change behaviors for sustainable water and sanitation services”, IRC, 10 September 2015 (available at
http://www.ircwash.org/news/change-behaviors-sustainable-water-and-sanitation-services; last accessed on: 23 November 2015)
240 Dalamangas, S., Presentation for the EPC Blue Gold Task Force Workshop, “Water: A factor of instability or an opportunity for
59 Micro-credits are an underdeveloped tool when it comes to supplying water and sanitation to the poorest, by providing loans to small enterprises and households. Microfinance activities in the water and sanitation sector can be put into three categories.241 Firstly, “Retail” loans, ranging from $30 to
$250, can be used by households to invest in water connections, the construction of wells, toilets or buying water purifiers.
A revolving sanitation fund in Vietnam set up by the World Bank and the Australian, Finnish and Danish governments for a total of $3 million provided small loans of an amount of $145 with partially subsidised rates to low income households. The loans stimulated household investments which, in combination with other sources of funding, enabled them to build or improve sanitation facilities such as composting latrines, sewer connections and, predominantly, septic tanks. It was managed by the Women’s Union of Vietnam and benefited 200,000 people between 2001 and 2008. The main problem with this mechanism was that very poor households could not resort to the loan because of their inability to pay it back.242
Similarly, The Water-credit programme elaborated by the US non-profit organisation Water.org enables households to contract small loans of an average of $194 by connecting financial institutions to communities. The repaid loans are then redeployed to other individuals with the advantage of freeing up subsidies for the poorest of the poor. Water.org has leveraged $97 million in commercial and social capital for an initial investment of $10.9 million in WaterCredit, benefiting 2.1 million people across nine countries (Bangladesh, Cambodia, Ghana, India, Indonesia, Kenya, Peru, Philippines and Uganda). Interestingly, women constitute more than 90% of the clients.243
Secondly, loans can be made to small and medium enterprises, including water vendors, sanitation service providers or community groups. Finally, loans can be contracted for urban upgrading and shared facilities, including slums.244 Microfinance institutions include NGOs, banks, non-bank
financial institutions and cooperative credit unions.
In order to tackle challenges linked to affordability and inequality, solidarity financing mechanisms could provide an interesting option. For example, with lifeline tariffs, people in need can have access to a volume of water corresponding to the essential minimum consumption, free of cost. Cross subsidies is a system enabling water utilities to charge wealthier households a higher amount, in order to compensate for rates applied to poor households below marginal costs. Solidarity funds can also be used to help people who cannot afford their water bill. As described in Chapter 3 Pricing water while ensuring access to water for all, a range of such solidarity financing mechanisms exist within Europe, which could also provide valuable lessons for emerging economies and developing countries.
Several solidarity financing mechanisms also enable European member states and local authorities to finance water and sanitation projects in developing countries and target populations who are often overlooked, such as populations living in rural areas or informal settlements.
241 More information at Mehta, M. (2008), “Assessing microfinance for water and sanitation – Exploring opportunities for Sustainable
Scaling up”, Study for the Bill and Melinda Gates Foundation, 5 July 2008
242 Van Huyen, M., Thuy, C., Trémolet, S. (2010), “Financing On-Site Sanitation for the Poor: A Six Country Comparative Review and
Analysis – Annex F: Vietnam Case Study”, WSP/The World Bank, January 2010, Washington, p.129
243 Water.org, “Water credit”, July 2015 (available at http://water.org/solutions/watercredit/; last accessed on: 23 November 2015) 244 More information at OECD (2010), “Innovative financing mechanisms for the water sector”, Paris
60 In France, the Oudin Santini law, adopted in 2005, enables local authorities and water agencies to